How to improve bad CIBIL score

CIBIL score is nothing but a simple 3-digit number that determines your worth and ability to take loans and other credit facilities. The loan applicant’s creditworthiness is determined by considering CIBIL score majoritarian. The number which ranges from 300 - 900 should be treated very crucially as it can land you in good as well as bad state.

Many applicants who approach banks and other financial institutions for loans have bad CIBIL (379-500) scores and get their loan applications rejected.

The reason behind having poor CIBIL is previous credit defaults that you have done and now bearing the consequences, but don’t worry the grievance of bad CIBIL can be rectified following a few simple tips and tricks. In this feature, we’ll be talking about the solutions and ways to improve bad CIBIL scores in order to avail of new loans and other credit facilities in impending future.

Easy ways to improve bad CIBIL scores!

CIBIL score which is below 500 is treated as comparatively bad it can get improved to 600-750 following simple tips that are discussed below

Track your credit utilization ratio

It is advised not to use a credit card for every transaction, make very limited credit transactions and keep your credit utilization ratio below 30%.

Avoid taking excessive debts

Taking too many loans and having a lot of pending payments will eventually land you in trouble. Extra credit/loans are not considered as a good sign and may negatively impact your CIBIL score. It is better if you pay off existing credits and then apply for new ones.

Stop checking your credit card score frequently

Most people don’t consider this as a red flag but in reality, checking your credit card score oftenly can actually land you in great trouble. Repeated enquiry is regarded as a soft enquiry and that can make your CIBIL score decline. Hence it is advised not to make recurring enquiries.

Keep your old credit cards active

In case you have an old credit card and no pending payment or loan, kindly keep that card active it can turn out to be virtuous for you and can boost your CIBIL score.

Stop delaying your pending bills

Make yourself a worthy creditor and always pay your pending bills on time. Paying off your expenditure on time will directly improve your creditworthiness and you become eligible to take big loans. In case you have a habit of not reminding of the date allow the automatic credit payment dedication method.

Don’t max out your credit limit

In some instances, people spend beyond their credit limit. The limit of credit is calculated on the basis of one's income. A credit card limit of more than 50% is a sign of irresponsible use and can cause you a poor CIBIL score.

Avoid doing court settlements with banks

Many times loan defaulters approach banks for settlement and are willing to close the loan at a lesser amount, banks do entertain these requests for closing pending loans but it is not a suggested option. Loan failure will definitely get reflected in your CIBIL score and will decrease your creditworthiness at the time of applying for a fresh loan.

Don’t go for a joint holder account

It is advised not to be a part of a joint account because your partner’s default can make you land in trouble. In case of payment failure by your partner will indirectly decline your CIBIL as well.

Take mixed loans

Banks offer two categories of loans secured and unsecured. Make your profile a blend of both secured and unsecured loans, availing of too many unsecured loans can sometimes cause a decline in your loans. Hence it is better if you avail of both varieties of loans.

Closure

The term CIBIL makes a huge impact on the creditor's profile and it's extremely important to maintain a good CIBIL score, a poor score will disqualify you as a loan applicant. Get some additional information and detailed Tips on How to Increase your CIBIL score from 600-750.

In the above write up we have deeply informed you with tips and recommendations on How to improve bad CIBIL scores to become eligible for further big loans.

You can follow these tactics and definitely note a positive rise in your 3-digit number and can apply for your dream loan.

FAQS on How to improve bad CIBIL score

Q.1 Why do I have a bad CIBIL score?

A bad CIBIL score is a result of payment failure, poor credit record, pending payments and excessive enquiries.

Q.2 What is the lowest possible CIBIL score?

299 is the below-average credit score, it is not possible to survive on credit transactions if you have this low score.

Q.3 What is a zero CIBIL score?

A zero CIBIL score signifies that history is available for less than 6 months or no information is available regarding the borrower’s credit history.

Q.4 What is CIBIL-1?

CIBIL-1 means that No History is available.

Q.5 How can I fix my bad CIBIL score?

Start paying off all your debts on time and don’t depend on credit.